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Financial Literacy Strategies: Where do We Go from Here?

Robert I. Lerman

The Urban Institute; American University; IZA Institute of Labor Economics

July 2006

Networks Financial Institute Policy Brief No. 2006-PB-10

The evolution of market economies has dramatically broadened the opportunities of consumers, workers, investors, and firms. Financial services have become especially free and accessible, but also increasingly complex. For the new financial freedom to help most people, they must understand their choices and the likely implications of alternative decisions. Unfortunately, many Americans have a weak grasp of basic personal finance principles. This paper emphasizes the importance of financial literacy in an increasingly complex market economy and examines the current state of financial education in the U.S. and abroad. We explore two methods of delivering financial knowledge - through broad financial curriculums and through more focused "teachable moments." After examining the pros and cons of each, along with the evidence about their effectiveness, we suggest that a combination of the two perspectives, with the specific topics and behavioral strategies varying by target audience. We conclude by calling for a more rigorous evaluation of the effects of existing programs.

Number of Pages in PDF File: 21

Keywords: financial literacy, financial education

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Date posted: August 9, 2006  

Suggested Citation

Lerman, Robert I., Financial Literacy Strategies: Where do We Go from Here? (July 2006). Networks Financial Institute Policy Brief No. 2006-PB-10. Available at SSRN: https://ssrn.com/abstract=923448 or http://dx.doi.org/10.2139/ssrn.923448

Contact Information

Robert I. Lerman (Contact Author)
The Urban Institute ( email )
2100 M Street, NW
Washington, DC 20037
United States
American University
4400 Massachusetts Avenue NW
Washington, DC 20816-8044
United States
IZA Institute of Labor Economics
P.O. Box 7240
Bonn, D-53072

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